CRTC hearings on Bell Media deal drama worth watching

Astral Media CEO Ian Greenberg speaks at the company's AGM in Toronto, Dec. 13, 2011. Bell Media owner BCE Inc. is in the midst of a $3.4-billion takeover of Astal and one of the key questions is whether the combined company would control too big a stake of the market.

When Canada's broadcast regulator released annual numbers last week detailing which companies owned what, it unwittingly unleashed a flurry of press releases.

BCE Inc. is in the midst of a $3.4-billion takeover of Astral Media, and one of the key questions is whether the combined company would control too big a stake of the market.

So, ownership numbers are key right now.

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The Canadian Radio-television and Telecommunications Commission has said in the past that any deal that sees one company control more than 35 per cent of the market would be examined closely, anything above 45 per cent was likely to be rejected outright.

The day the CRTC released its report, BCE's opponents (comprised of some of its biggest competitors) issued a press release saying the report clearly showed BCE's media division Bell Media would be well above those thresholds. Bell issued a press release saying the numbers clearly illustrated the transaction wouldn't come close to breaching the warning mark.

But for most other industry watchers the competing press releases clearly illustrated something else – after a summer of back-and-forth arguments in the media, it's time for the broadcast regulator to hear the case and make up its mind once and for all.

The week-long hearings start today in Montreal, with Bell making the case for the transaction. Things will heat up quickly, with Quebecor Inc.'s chief executive officer Pierre Karl Peladeau – the driving force behind the opposition and owner of Quebec's largest television provider – making his case against immediately afterward.

The deal would see Bell own more than 100 radio stations and almost 90 TV channels. In recent advertisements, Bell argued the objective of its proposed combination with Astral is "to enhance competition and consumer choice by supporting the development of new content across multiple platforms."

But Bell's adversaries insist it will use its size to force them to pay more to carry popular Bell products such as TSN, something Bell says is impossible given the vertical integration rules introduced by the CRTC a year ago. But companies such as Telus Corp. aren't interested in Bell's assurances and will ask the CRTC to stop the deal (it could also force Bell to modify the deal if it has any concerns).

"Until such a time as we see some significant increase in the safeguards and the way these safeguards are going to be implemented and adhered to, we're not comfortable with seeing Bell Media getting any bigger than they are now," said David Fuller, Telus' chief marketing officer.

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"We think that the potential for market abuse on the part of Bell, given the degree of concentration they will end up having subsequent to this acquisition, is extreme and that has us very concerned."

The question now is whether the CRTC feels the same way (there's still the matter of the Competition Bureau, which also has to approve the deal before it can proceed).

But don't worry about missing any news as the deal nears its conclusion – every small development will likely spawn a flurry of competing and contradictory press releases from the companies as they try to sculpt public opinion in the final days of the process.

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